Stock Market Highlights: Indian equity indices, Sensex and Nifty snapped four-day gaining streak to end lower Tuesday dragged by selling in metals, pharma and IT stocks. Broader markets outperformed, with Nifty Smallcap100 and Nifty Midcap100 indices ending higher. Among sectoral indices, Nifty Metal, Nifty Private Bank, Nifty Financial Services, Nifty IT and Nifty Pharma ended in the red, while gains were seen in PSU Bank, auto, media and realty indices.
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Ajit Mishra, VP - Research, Religare Broking
Markets traded volatile and lost over half a percent, taking a pause after the recent rebound. The benchmark opened gap down following weak global cues on the back of rising concerns over inflation due to sharp rise in commodity prices. It made an attempt to recover losses as the session progressed but selling pressure in the latter half again pushed the index in the red. Markets reacted to the global fear of rise in inflation which might trigger the rate hike earlier than anticipated. On the benchmark front, Nifty has been struggling to cross 15,000 mark for the last two months and is witnessing the slide again after reaching almost to that zone. However, we feel the downside could be capped this time due to the existence of support around the 14,600 zone. Having said that, participants should limit leveraged positions and maintain their focus on stocks selection and risk management.
Sugandha Sachdeva, VP- Commodity & Currency Research, Religare Broking
The Indian rupee has remained fairly anchored in the past couple of days supported by strong gains in domestic equities and softness in the American currency. Considering the poor jobs report for April, the Fed is not expected to dial back on its ultra-easy monetary policy anytime soon. This is pressurizing the dollar index and leading to an appreciation in the local currency. Going ahead, CPI data from the US shall be closely watched for any change in stance by the US Fed. However, the sharp spike in Covid cases in the country amid the second wave has once again raised uncertainty and is a big drag on the growth prospects. S&P Global Ratings has already revised India’s GDP growth forecast to 9.8% from previous estimates of 11% for the FY 22. Considering the landscape, we envisage the rupee to face a hurdle around the key 73.20 mark. Only in the case that is breached, further upside looks likely for the Indian rupee else the room is open for depreciation all over again.
Deepak Jasani, Head of Retail Research, HDFC Securities
The Indian benchmark equity indices broke a four-day winning streak on May 11. Nifty opened gap down due to weak global cues but inched up gradually through the day with some volatility. Nifty fell but did not close at the intraday lows. In fact, Nifty was among the most outperforming indices across Asia having fallen among the least. The advance-decline ratio continues to be positive suggesting broad-based buying in the markets. The fact that May 10 was the first day in recent times when the total Covid cases fell in India helped sentiments improve. 14,744-14,892 is the band for Nifty in the near term.
Market At Close | Here are today's top gainers among Nifty50 constituents
Market At Close | Here are the top losers among Nifty50 constituents
Market At Close | Market snaps 4-day gaining streak, tracking weak global cues
Sushil Kedia, Founder, Kedianomics
If Nifty does not go past 15,100, I am looking at a potential down move to 13,800. We might again see some strength in the morning tomorrow but unless 15,000 is reclaimed, let us get ready for playing in pieces a move down to 13,800.
Manish Shah, Founder, www.Niftytriggers.com
Nifty closed the day marginally lower for the day but the highlight of the day was a sharp bounce off the lows. Nifty gained by close to 100 points from the low of the day. Thus the close is above the open and in Candlesticks philosophy of chart analysis, the open to close is more important than a close to close relation. The barrier at 15,050-15,000 is acting as a tough resistance zone as repeated attempts to surmount this peak is rejected by strong selling pressure. The zone at 15,000-15,050 needs to get surpassed for the rally to resume to higher levels.
Nifty held above the support of 50 period moving average. Currently, the average is 14,737. If we see Nifty break below this average. There could be a decline to 14,570-14,550. For Nifty to move higher it is imperative that it breaks above 15,000-15,050. Tomorrow is the weekly expiry. It could again be a low volatility play on the weekly expiry day. Individual stocks could still thrive in this lacklustre phase seem on Nifty.
Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments
The index respected the 14,700 levels and closed way above it. We are in an interesting juncture where the Nifty is expected to achieve 15,200-15,250 and the stop is a close below 14,700. We are closer to the stop than the target which makes this a good risk-reward trade!
Market At Close | Here are the highlights from today's market session
- Market Snaps 4-day Gaining Streak, Tracking Weak Global Cues
- Midcap Outperform Frontliners With Mkt Breadth Favouring Advances
- Sensex Slips 341 Points To 49,162 & Nifty 92 Points To 14,851
- Nifty Bank Falls 270 Pts To 32,872 While Midcap Index Rises 195 Pts To 24,972
- Financials & Metals Drag Market While PSUs Lend Support
- All Top 6 Nifty Gainers (CIL, NTPC, IOC, ONGC, BPCL, Pwr Grid) Are PSU Stocks
- JSW Steel, Kotak Bank, Hindalco, HDFC & Wipro Are Top Nifty Losers
- BHEL, Coforge, CONCOR, GAIL, Voltas Gain The Most Amongst Midcaps
- Neuland Lab Slips 10% & Granules 1% After Q4 Earnings
- UPL, Godrej Cons & Siemens Close With Gains Ahead Of Earnings
Closing Bell | Indian benchmark equity indices snapped four-day gaining streak to end lower Tuesday dragged by selling in metals, pharma and IT stocks. The Sensex slipped 340.60 points, or 0.69 percent, to 49,161.81, while the Nifty ended 91.60 points, or 0.61 percent lower at 14,850.75. Broader markets outperformed the benchmarks as Nifty Smallcap100 and Nifty Midcap100 indices closed 0.8 percent higher each.
Among sectoral indices, Nifty Metal, Nifty Private Bank, Nifty Financial Services, Nifty IT and Nifty Pharma ended in the red, while gains were seen in PSU Bank, auto, media and realty indices. On the Nifty50 index, JSW Steel, Hindalco Industries, Kotak Mahindra Bank, HDFC, and Divi's Laboratories led the losses, while Coal India, NTPC, IOC, ONGC and BPCL were the top gainers.
Gopal Kavalireddi, Head of Research at FYERS
Equity schemes saw a drop in net inflow, coming in at Rs 1,783 crore versus a strong inflow of Rs 7,376 crore in the previous month. After being battered in the second half of the previous calendar year, hybrid category is making a strong come back with Rs 21,696 crore on net inflows in the current calendar year versus a net outflow of Rs 29,203 crore in H2CY20. This is a remarkable change as investors opted for arbitrage and dynamic asset allocation funds as compared to pure equity funds.
Among pure equity, sector/thematic funds have witnessed quite an interest with IT, Pharma, Natural Resources, and other sectoral themes delivering large returns over a short period of time. Index funds and new Fund of Fund offerings continue to interest the investors as global equities continue to rise unabatedly, while Indian markets continue to consolidate their position for the last 2 months. Total assets under management for April ended at Rs.32.38 lakh crore, a minor increase in comparison to the fall seen in March.
With the second wave of the coronavirus pandemic putting pressure on citizens to hold a higher emergency corpus for medical needs, investor interest is a tad down and can be expected to recover in the waning phase of this health scare.
April MF data: Dip MoM; considerable gains in equities & fixed income, says IDFC AMC CEO
There are considerable gains in both equities as well as fixed income, said Vishal Kapoor, CEO of IDFC AMC, on Tuesday. April mutual fund data shows a net equity inflow of Rs 1,783.1 crore versus Rs 7,376.1 crore month on month. Speaking in an interview with CNBC-TV18, he said, “There are considerable gains in both equities as well as fixed income and at an aggregate level the industry has gained almost 1 crore of assets. So nice bump up in a month.” “However, month on month there is a slight dip, but need to keep in mind the overall business as well as investor sentiment in April. We were and have been in the middle of a full-blown pandemic with a lot of distribution effort as well as personal finance investment type decisions been relegated and given all of that to have net equity inflows in a month like April would still be, to my mind, a fairly positive picture,” he said. Watch here.
Shankar Sharma sees long-awaited uptrend in commodities
Global metal prices have seen a stupendous rally. What are the factors driving up the prices and what do technical charts suggest? Shankar Sharma, VC and Joint MD of First Global weighed in on this in a conversation with CNBC-TV18. According to Sharma, there is a long-awaited uptrend in commodities. “I just think that there is a long-awaited uptrend in commodities which is not going to be just a flaky six months or 1 year kind of thing. I think it is a little bit of a longer thing that is playing out. It is driven by the Fed’s policies of this huge amount of looseness that it has exhibited in the wake of the crisis. It is because of that money is just going to fuel all kinds of things apart from the stock market. So, it has steeped from the stock market into the physical market of commodities,” he said. He also said that people have sold forward and now have to pay massive backwardation charges. Read here.
Siemens Q2FY21 preview: Street expects profit to grow by 49%
On a lower base, most capital goods companies are expected to do well and Siemens will be no different. CNBC-TV18 poll is expecting a double-digit 10.3 percent growth in revenue and expansion of a 150 basis point in EBITDA margins coming at around 11 percent. Expect the profit to grow by around 49 percent. The order flow expedition and execution is something that will play in favour of Siemens. Besides a fact that the industrial segment has seen a significant uptick in order inflow, we are also looking at some of the shorter-term orders to come into play as far as revenue growth is concerned as well as lift margins. In terms of the order inflow expecting about Rs 3,100 crore with this particular quarter as compared to a sequential Rs 2,900 crore so that is also something that will play out in favour of Siemens. Watch here.
April AMFI data: Net equity inflows see a dip, SIP collections drop
Mutual Funds (MFs) see a dip in net equity inflows in April. Monthly systematic investment plans (SIPs) also fall versus in March. The assets under management (AUM) this time around has grown a little over Rs 32 lakh crore. The total assets of inflow in the debt schemes have crossed Rs 1 lakh crore mark. Liquid funds have seen almost Rs 41,000 crore of money coming in. Overnight and Money Market funds have also done well, each getting in close to about Rs 20,000 crore. Watch here.
MFI Association Sa-Dhan writes to RBI Governor, seeks support for sector amid second Covid wave
Sa-Dhan, one of the major industry associations of microlenders, has written to the Reserve Bank of India (RBI) seeking an emergency credit line to fight the challenges posed by the COVID-19 second wave. It said the SLTRO of Rs 10,000 crpre for SFBs has been of help, but more support is needed. SaDhan has sought an Emergency Credit Line of upto 25 percent of loans for MFIs from their lending banks. It says MFIs would be able to mobilise Rs 15,000 crore via Emergency Credit Line if implemented. It also seeks Special Liquidity Facility of Rs 15,000 crore via NABARD, SIDBI, with 40 percent earmarked for small MFIs with portfolio less than Rs 500 crore.
The industry body has also sought greater push for lending from banks to MFIs under on-tap TLTRO. It has requested RBI to introduce Partial Credit Guarantee Scheme 3.0 to lend to MFIs, especially smaller ones with lower rating. It said that only 40% of lenders provided moratorium to MFIs in first Covid wave and has sought moratorium or restructuring support for 6 months to 1 year. It has also asked RBI to allow relaxation on provisioning norms for MFIs upto Dec 2021 to ease liquidity pressure and help to re-iterate to States the ill-effects of any loan waiver in these times.
Significant downside risks to earnings in auto, consumer durables, says Gautam Duggad of Motilal Oswal
Gautam Duggad, Head-Research, Institutional Equities at Motilal Oswal Financial Services, in an interview with CNBC-TV18 said that he expects significant downside risks to earnings in auto, consumer durables sectors. However, he added that metal sector earnings are likely to witness no large changes in Q4. “There has been no change so far because of what Tata Steel has done. Before Tata Steel reported the numbers, our earnings estimate was down by about 2 percent for FY22 and post-Tata Steel the net earnings have seen an upgrade now, it is plus 2 percent. So that is how sharp the impact of Tata Steel number revision has been,” Duggad pointed out. Read here.
Granules India Q4FY21 | The company's net profit rose 38.2 percent to Rs 127.6 crore from Rs 92.3 crore, while revenue increased 33.2 percent to Rs 799.3 crore from Rs 599.9 crore, YoY. EBITDA was at Rs 202 crore as against Rs 100 crore and EBITDA margin was at 25.3 percent as against 16.7 percent, YoY.
Market Watch: Shrikant Chouhan, Kotak Securities
- Buy Lupin with a stop loss of Rs 1,180 and a target of Rs 1,270-1,280.
- Buy UPL with a stop loss of Rs 660 and a target of Rs 710-720.
Expect INR to underperform other EM currencies: Deutsche Bank's Sameer Goel
"I would be inclined to think that the rupee (will) underperform the other emerging market currencies,” said Sameer Goel, Head of Asia Macro Strategy, Deutsche Bank in an interview with CNBC-TV18. He elaborated, “...primarily because I feel the possibility of these lockdowns being extended and therefore more materially impacting growth estimates – that probability is still there and that risk needs to be accounted for by the market." The Indian rupee slumped 18 paise to 73.53 against the US dollar in opening trade on Tuesday tracking weak domestic equities and strong American currency. “Over the next few weeks, the dollar trend will now be a lot more relevant and I think the broader dollar trend is going to be more dovish in nature and that will give rupee more footing, more ability,” he stated. Read more.
Cadila Healthcare | The company has set Virafin price at Rs 11,995 per dose and has started the despatches. The company claims that Virafin can cut Oxygen support need in COVID patient, reports said.
IDBI Bank | The bank's board will consider equity capital issuance through various modes on May 15.